Daniel Gupta, Amtel Properties

Amtel Properties is a family-owned company that was founded in 2005. The company's portfolio totals 1 million m², of which 200,000 m² is built and income-generating, and over 200,000 m² is under construction. It includes business centers, logistics complexes and hotels. Daniel Gupta, CEO of Amtel Properties, spoke to Leon Goldwater about the scope and the future plans of his company.

Which are your focus markets?

We work in four different countries: Russia, Ukraine, Belarus and Georgia, but most of our assets are in Russia, and mainly in Moscow and St Petersburg. We work across different segments, in commercial real estate, logistics parks, business parks, hospitality, retail, and we have a big residential project in St Petersburg.

Many people seem to believe that there is a lot of opportunity in retail. Are you heavily involved in this segment?

We always look out for opportunities, which is why we decided to pursue retail projects as well. Personally, I share the general optimism regarding this segment.

Do you manage the assets after you build them?

We are a full-cycle developer; we design the project, build it and manage it ourselves, with a few exceptions. The exceptions are mainly the hospitality properties, in which case it is more efficient that they are managed by professional companies. We work very closely with Hilton and Ascott group.

We currently have two operating hotels and three under construction. There is certainly a lot of opportunity in this sector across the markets that we are working in. Our view is that the highest value lies with mid-range properties, namely three to four star hotels as opposed to four to five stars.

What is your opinion about financing at the moment and what needs to change?

Generally speaking, project financing is available but the terms are a lot less generous than before crisis and banks are very selective on what and whom they finance. Some of the most important factors are track record, construction permits and a substantial equity invested in the project.

Is there opportunity for international investors and funds in Russia?

Russia is certainly a place where yields are higher compared to other Eastern European or Western European markets. Secondly, if you look at Russia, even Moscow has one of the lowest stocks of residential, retail, office space per capita than most other markets. In the hospitality segment it is way lower; there are two hotel rooms per 1,000 people in Moscow, as opposed to eight for Paris and 12 for London. The average is six for capitals of Eastern European countries. So there is ample room for growth. If you put these two factors together, there is certainly a good case to be made that Russia is an attractive destination for real estate investment.

What lies in the future for Amtel Properties?

We have a very good pipeline of projects, in the next 18 months we will double our income-generating real estate and in about the same time we plan to make the company public. We will then concentrate on making Amtel Properties a very transparent, efficient and lean company that is very easy to understand for potential investors.

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